Total Clusterfact: Sorting out Solyndra

“There’s never been more money shoved out of the government’s door in world history, and probably never will be again, than in the last few months and the next 18 months, and our selfish parochial goal is to get as much of it...as we possibly can,” -George Kaiser

Slowly but steadily the media have been picking up the Solyndra story. That's the failed solar panel company that lost over $500 million of taxpayer money. PolitiFact has decided to tackle this complex issue with it's usual high standards. If you're short on time, let me give you the condensed version coming out of the Obama campaign headquarters St. Petersburg Times fact checkers:

There is no scandal. But if there is a scandal, it was inherited from the previous administration.

That's right. It's Bush's fault.

For those readers with a bit more time on their hands, lets take a look at PolitiFact's recent assault on reality:

Image from PolitiFact.com

PolitiFact reviews an Americans for Prosperity ad and helpfully specifies what they're going to sort out the truth of:

We decided to fact-check the ad, focusing on whether the president gave "half a billion in taxpayer money to help his friends at Solyndra, a business the White House knew was on the path to bankruptcy."

They can't screw this one up, can they? Multiple media reports have shown beyond dispute that Obama donors are closely tied to Solyndra, and also that the White House was aware of Solyndra's problems prior to the loan. So just how bad did PolitiFact flub this rating? As the indefatigable Inigo Montoya once said: Lemme esplain...No, there is too much. Lemme sum up.


Are Solyndra executives really Obama's friends?

Ben Bierman, executive vice president of operations and engineering for Solyndra, donated $5,500 to Obama’s election campaign. Karen Alter, senior vice president of marketing, donated $23,000 in 2008.

According to information collected by the Center for Responsive Politics, Solyndra board members have donated at least $27,400 to Democratic campaigns and affiliates.

Since 1998, Solyndra board member James F. Gibbons has contributed $13,500 on his own. Board member Winston Fu has contributed $4,550 since 2008. Since 1991, board member Thomas Baruch has contributed $7,150. And board member Steven R. Mitchell donated $2,300 to Obama in 2007.

What kind of crack investigative journalism did I have to perform in order to unearth this inculpatory evidence that PolitiFact was unable to find? I clicked on the link PolitiFact provided in their rating. It leads to the Daily Caller article that Americans for Prosperity used as a source for their ad. PolitiFact doesn't refudiate these claims, they simply dismiss them as irrelevant by saying only "A handful of other executives affiliated with Solyndra's management and board donated to the Obama campaign or other Democrats over the years."  A "handful of executives" is enough to make the Americans for Prosperity ad True with respect to the "Obama's friends" portion of the claim. At any fact checking outfit other than PolitiFact, that is.

PolitiFact instead focuses on the big fish, George Kaiser. Throughout the unfolding scandal Kaiser has become the main target of political kickback accusations. Kaiser is a well known bundler for Obama and even donated $53,500 of his own cash to Obama's campaign. PolitiFact, however, poo-poo's Kaiser's status, writing:

For a little context, in the big-money world of presidential fundraising, he's among 560 elite fundraisers for Obama, though not in the top tier who gathered upwards of half a million each.

Kaiser's involvement with Solyndra is hardly tenuous. Simply put the George Kaiser Family Foundation is a private foundation. The investment arm of the Kaiser Foundation is Argonaut Ventures. Argonaut Ventures is the largest stakeholder in Solyndra. Dots=Connected.

But PolitiFact doesn't want you to get confused with all that messy business. They quickly point out
the clarifying facts of these prejudicial perceptions:

Kaiser, though, is neither a shareholder nor an executive of Solyndra.

That would be an excellent rebuttal if Americans for Prosperity claimed that he was. The AfP ad describes "wealthy donors with ties to Solyndra," a description that fits Kaiser perfectly.

Kaiser isn't on the foundation's board or Argonaut's or Solyndra's.

I'm noticing a pattern here.

It's important to note here that Kaiser was never in a position to profit from Solyndra...

Has PolitiFact mentioned that Mr. Kaiser would not have benefited personally in any way from his foundations investments?

"The investment in Solyndra would not have benefited Mr. Kaiser personally in any way."

Says who?

...said C. Renzi Stone, a spokesman for the foundation.

I see.

Glad we sorted that out.

Or did we?

Unfortunately our fact-furnishing friends forgot to inform us of one little thing: There is another Solyndra investor that may possibly have ties to George Kaiser. I'm speaking of the curiously named George Kaiser Family Foundation Investment Company, LLC. (Note: that's different than the George Kaiser Family Foundation.) The GKFF Investment Company is another investment arm of the private foundation. GKFF IC is invested in Solyndra to the tune of $50 million dollars. The MuniLand column at Reuters does the math:

Two of Solyndra’s largest investors are Argonaut Ventures I, L.L.C. and the GKFF Investment Company, LLC. Both firms are represented on the Solyndra board of directors by Steven R. Mitchell (see Solyndra S-1 page 119). Both are investment vehicles of the George Kaiser Family Foundation of Tulsa, Oklahoma.

...

George Kaiser alleges that he didn’t discuss Solyndra with any White House officials but his investment vehicles were very hot for Solyndra. I went back into Solyndra’s IPO filing and totaled up the amount of funding Kaiser’s investment businesses gave Solyndra. Over 9 rounds of financing it invested approximately $337 million, or 48% of all equity raised for the business.

Ultimately whether or not George Kaiser profited from Argonauts investment in Solyndra is totally irrelevant to the veracity of Americans for Prosperity's claim. (Though it may be relevant to understand that there can be plenty of upside in a colossal collapse). Even if Kaiser doesn't personally profit from the investment, clearly he has a vested interest in seeing that his foundations investments are successful. The fact that Kaiser visited the White House seventeen times (including four times the week prior to the loan approval) is enough to qualify him as one of "Obama's friends." Assuming the Argonaut investment was intended purely for charitable purposes doesn't make the ads claim false. And we still have the list of Solyndra executives that did donate to Obama. Whatever Kaiser's role in this mess may be it is undeniable that Kaiser is a "wealthy donor with ties to Solyndra," exactly the accusation made in the Americans for Prosperity ad.

Despite dismissing Kaiser for not being a campaign donor in "the top tier who gathered upwards of half a million", there is one Obama bundler connected with Solyndra who resides in Obama's "$500,000 plus" club. That would be Steven Spinner. According to the Los Angeles Times Spinner raised over half a million dollars for Obama's '08 campaign, took a break from fundraising, and now he's back at it, most recently setting up Obama's L.A. cash grab at the W hotel. To be fair, Mr. Spinner is not, and never was, an executive at Solyndra. Rather, during his short break from raising money for Obama, Spinner was enjoying his appointed position as a top administrator in the Department of Energy. And what was Spinner's job at the DOE? (Wait for it...) Spinner was responsible for the loan program that approved Solyndra's 535 million dollars in taxpayer money. But that's not all! Whose law firm represented Solyndra in negotiations with the DOE? None other than the lovely Mrs. Steven Spinner. But you wouldn't know that from reading PolitiFact.

Even though he signed an ethics pledge specifically regarding Solyndra, and officially recused himself from any Solyndra negotiations, Spinner's emails proved embarrassing to the White House. ABC News has the goods:

"I have OVP [the Office of the Vice President] and WH [the White House] breathing down my neck on this."

And while Spinner claims he had nothing to do with the Solyndra negotiations, he still got an attaboy from his boss at the DOE, Matt Rogers:

Thanks for driving Solyndra.

But maybe Spinner and his wife don't count as one of Obama's friends at Solyndra. They certainly weren't worth mentioning in a fact-check article sorting out the truth of any shenanigans going on, at least not to PolitiFact. But what about Ken Levit?  Investors.com sums it up nicely:

In a Feb. 27, 2010, email, Ken Levit, executive director of Kaiser’s foundation wrote: “Thanks. We met with ARRA (American Recovery and Reinvestment Act, aka the stimulus bill) recovery team in (Vice President Joe) Biden’s office — the seemed to love our Brady Project — also all big fans of Solyndra.” The name of the recipient of the email is redacted.

He was a little more colorful in an email the same day to Steve Mitchell, a Solyndra board member:

“They about had an orgasm in Biden’s office when we mentioned Solyndra.”

“That’s awesome! Get us a DOE loan,” Mitchell replied.

Somehow all of this escaped our fact finding friends. See no scandal, hear no scandal, speak no scandal. What PolitiFact does have time and space for, however, is pointing out the nefarious deeds of those ubiquitous bogeymen of the left, the Waltons:

Meanwhile, Madrone Partners, which owns more than 10 percent of Solyndra, is an investment vehicle for another family — the Waltons of Walmart fame. While some argue that Walmart is no longer a conservative company that focuses solely on GOP causes, a search of Federal Election Commission records for contributions from people who list Madrone as an employer still shows most cash benefited GOP recipients. General partner Gregory Penner, for example, a Walton in-law, gave primarily to Republicans, such as $5,000 to the Senate Conservatives Fund, $10,000 to the Republican Party of Kentucky and $10,000 to McCain Victory 2008. He also made smaller contributions to a handful of Democrats such as U.S. Sen. Ben Nelson of Nebraska.

Notice that earlier PolitiFact only devoted a single line to the direct donations to Obama ("A handful of other executives affiliated with Solyndra's management and board donated to the Obama campaign") yet now devotes an entire paragraph to an investment group with (supposedly) conservative sympathies donating to Republicans. Speaking of handfuls, we see that word again repeated in the final sentence, noting that a Madrone partner gave "smaller contributions to a handful of Democrats."  The National Legal and Policy Center fills us in on the details PolitiFact doesn't deem worthy of reporting:

Madrone’s Greg Penner and his wife Carrie – the daughter of Walmart chairman of the board Rob Walton – most recently gave $7,200 to the successful U.S. Senate campaign of Democrat Michael Bennet, from Colorado. Mrs. Penner also donated $2,300 to President Obama’s 2008 campaign...

PolitiFact wants us to know about the donations from the Walmart group to Republicans, but the $2,300 to Obama isn't noteworthy in this fact check about taxpayer money going to Obama's friends at Solyndra.


Click the "Read More" link below to continue reading this post.

Money For Nothing and Your Checks Fact Free

Fairy Godmothers, Leprechauns and the Federal Reserve.

What do they have in common? Obviously, the magical ability to create something out of nothing. In the Fed's case, it's cold hard cash. Don't believe me? Just ask PolitiFact:

Image from PolitiFact.com (Arrow added)

In this case, for once, PolitiFact deals relatively fairly with Kucinich's statement, and provides a decent analysis of what transpired regarding how the Fed created the money and how and to whom it was passed out to. For that reason there's no need to get into the details of their fact check.

The problem with this rating is their acceptance of the liberal dogma that the money is just simply created out of nothing without any tangible cost. PolitiFact even gives a "Hells Yeah!" to the success of the operation-

Eventually, all the money was repaid, with interest. But according to [Walker] Todd, rather than wipe the money off its books, the Federal Reserve chose to use much of it to further stimulate the economy by purchasing Fannie Mae and Freddie Mac mortgage-backed securities on the open market. So that money remained in circulation.

Hooray! It worked so well the magic money created even more money, and then went to support housing programs for the poor! Heck, it makes you wonder why the Fed doesn't just print a gajillion quadzillion dollars every day. Goodbye debt and deficit, helloooo Easy Street.

The reality that PolitiFact is evading is this money actually does come at a cost. It's not created out of nothing, but rather at the expense of the money that's already in circulation. This my friends, is the evil known as inflation.

To individuals, inflation is a lot like getting mugged, but not at the point of a gun in the streets. Inflation is the slow theft of your property by the very people charged with protecting it. Jonathan Hoenig has a simple explanation:

One need not be an economist to understand inflation. If you started writing checks with no money in your account, they'd throw you in jail. Yet when the government does it, at least for the time being, it's called "stimulus" and rewarded with high approval ratings, that is, until the bills come due. And they always do.

...

The law of supply and demand cannot be conned. And as the supply of money increases, prices rise, and the dollars you and other productive members of society have worked so hard to save decrease in value.

PolitiFact doesn't tell its readers that inflation, created by government tomfoolery, hurts those who save and the poor the most. And if there's any doubt about the destructive nature of inflation, Hoenig wrote another article about the chilling yet very real case of Zimbabwe:

In 2008, the Los Angeles Times reported how a beer in the Zimbabwe capital that cost 100 billion Zimbabwe dollars on July 4 had already risen to 150 billion an hour later. A few months after that, Zimbabwe issued the 100 trillion-dollar banknote, then worth about $30 (U.S.).

...

In 1980, the Zimbabwe dollar was actually worth more than the U.S. dollar. What deteriorated over those 29 years wasn't the weather or the water, but the political philosophy. Once known as Africa's breadbasket, government destroyed the currency to the point where even "billionaires" were starving in the street.

Frankly, I haven't spent $150,000,000,000 on beer since I hung out with these guys one morning in Green Bay. I can't imagine paying that for a single can of sudsy goodness.

The bottom line is PolitiFact did a serious disservice to their readers by ignoring the real cost of the Fed's magic money. It's not created out of thin air. It's a tax on income you've already earned and a tax you had no chance to vote on. Inflation devalues the wealth you have labored so hard to produce, its worth destroyed by the whim of political expediency.

History is littered with examples of the evils of inflation. Unlike magic money, inflation is real. Kucinich should be allowed a license for hyperbole. He's a politician and was speaking in a condensed television format. But PolitiFact promotes themselves as the arbiters of truth and likes to squawk about giving readers the whole story. The act of ignoring such a relevant component of this story proves they're inclined to pick and choose which facts they want their readers to know.


After Hours: I actually have a few Zimbabwean hundred trillion dollar bills that I purchased on Jonathan Hoenig's website, along with some other cool things. You should go there and buy stuff.